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Gas Emission Regulation

LUKOIL'S STANCE ON CLIMATE CHANGE

Russia's role in the reduction of greenhouse emissions has become more active due to the issue of decree No. 752 "On Reduction of Greenhouse Emissions" by the RF President of September 30, 2013, as well as due to Russia's active position at the 21st UNFCCC Conference held in December 2015 in Paris.

The Company is actively involved in the discussions and activities on the regulation of greenhouse emissions as scheduled by Order No. 504-r of the Russian Government of April 02, 2014, as well as by the management decisions on development of the corporate system on recording and managing greenhouse emissions.

Guidelines on the quantitative measurement of greenhouse emissions based on the key provisions of the previously developed PJSC LUKOIL's Procedures were elaborated and approved by the Order on the Russian Ministry of Natural Resources and Ecology in 2015.

The documents adopted by the Russian Government in 2017 introduced mandatory reporting on the amount of greenhouse emissions.  Therefore, it is essential that the Guidelines be tested in 2016 with regard to the measurement of greenhouse emissions by operational facilities of all of the LUKOIL Group Organizations based in Russia.

As an environmentally responsible company, PJSC LUKOIL admits that global climate change prevention effort is extremely important.

As an environmentally responsible company, PJSC LUKOIL admits that global climate change prevention effort is extremely important.

BACKGROUND INFORMATION ON THE KYOTO PROTOCOL

The Kyoto Protocol to the United Nations Framework Convention on Climate Change signed in 1997 and ratified by the Russian Federation in 2004 opened a new page in the history of harmonization between the people and nature by providing efficient tools for system-based regulation of environmental impact and greenhouse emissions, including those generated by the oil and gas companies.

Starting in 2005, the Company has been actively managing greenhouse emissions based on its own voluntary initiative. The urgency of such effort for the Company was conditioned by the following factors:

  • In the course of its operations the Company generates significant greenhouse emissions;

  • Application of traditional emission reduction mechanisms would involve major costs for the Company, and is extremely expensive; 

  • The world, including Russia, created a legal, organizational and technical framework for the application of environmental economic mechanisms to regulate greenhouse emissions.

For these purposes the Company has developed and approved the Production Planning Concept across the LUKOIL Group organizations based on the provisions of the Kyoto Protocol, and a Comprehensive Action Plan aimed at implementing the Concept.

After conducting an inventory of greenhouse emissions, assessment of carbon potential, preparation and determination of carbon design documents, the Company developed a portfolio of greenhouse emission reduction projects in the LUKOIL Group.

The carbon portfolio of the LUKOIL Group included 14 Russian projects aimed at the reduction of greenhouse emissions in the upstream, downstream and power engineering business sectors. Their implementation helped reduce greenhouse emissions by 32 million tons over the first commitment period under the Kyoto Protocol from 2008 till 2012.

Should this effort be a success, the ultimate goal could be to generate revenues by selling emission reduction units and to further reinvest the generated funds into new environmental and energy efficiency projects.

Project Title

Total ERU generated by over 2008-2012 (tons of СО2 equivalent)

1Utilization of APG at Sredne-Khulymskoye field (RITEK OJSC)402 899
2Utilization of APG at Vostochno-Perevalnoye field (RITEK JSC)271 054
3Utilization of APG at Sergin field (RITEK OJSC)66 283
4Upgrading of process pipe furnaces at LUKOIL-Permnefteorgsintez833 000
5Utilization of associated petroleum gas from Verkhnekamsk oil fields (LUKOIL-Permneftegazpererabotka)379 189
6
Expansion of Krasnodar TPP by installation of a 410 MW CCGT (LUKOIL-Kubanenergo)
1 506 976
7
Reconstruction of Astrakhan state district power power which involved installation of a 110 MW CCGT (LUKOIL-Astrakhanenergo)
503 367
8Construction of hydrocarbon gas treatment and compressing facility at Severo-Gubkinskoye field (LUKOIL-West Siberia)8 581 353
9Utilization of APG by LUKOIL-West Siberia in Khanty-Mansi Autonomous Okrug (LUKOIL-West Siberia)10 148 383
10Utilization of APG at Yuzhno-Khylchuyuskoye field, Nenets Autonomous Okrug (Naryanmarneftegaz)1 615 111
11Construction of small power generation facilities at the fields operated by LUKOIL-Komi725 646
12Reduction of associated petroleum gas flaring by LUKOIL-Perm542 113
13Construction of small power generation facilities at the fields operated by LUKOIL-West Siberia2 942 396
14Construction of compressor station at the Severo-Danilovskoye field operated by TPP Urayneftegaz (LUKOIL-West Siberia)4 306 420
TOTAL 32 870 215

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